Range-bound. Nifty, Sensex to move in a narrow range

The domestic markets are likely to open on a flat note on Thursday amid mixed global cues. SGX Nifty at 17,800 indicates that another lacklustre day is on the cards, as Nifty futures closed at 17,795 on Wednesday.

The majority of Asian stocks are up, despite US stocks closing on a mixed note. While the repeated hawkish statements from US Fed members kept the equity market nervous, some believe the worst is over on the rate front.

Ajit Mishra, VP - Technical Research, Religare Broking Ltd, said, though market participants globally are once again haunted by rate hike concerns, recent price action indicates the panic would subside soon and markets will attempt to inch further higher in the following sessions.

Analysts expect domestic markets to move in a narrow range till fresh triggers lift the overall sentiment. Till such a time, the narrow market will provide good buying opportunities outside the benchmark indices.

Strong fundamentals

George Thomas, Fund Manager- Equity, Quantum AMC, said: “While India’s strong fundamentals would ensure reasonable long-term returns, managing risk is equally important to ensure a good investment experience over the long term. Unlike the popular perception, higher risk needn’t always result in superior returns. Historic risk measures such as standard deviation may not capture the fund’s preparedness to handle adverse scenarios in the future.

Technically, the bullish trend is likely to continue for benchmarks in the short-term, say analysts.

Rohan Patil, Technical Analyst, SAMCO Securities, said: “The bullish candles have shown optimism amongst traders, but the index needs to cross 17,800–17,850 levels on the higher side for a shift in the momentum. On the lower side, 17,600 and 17,550 will act as a support zone for the index.”

“Amid mixed global cues, buoyancy in the banking space combined with selective buying in index majors from across sectors such as energy, IT, auto and FMCG could continue to play a vital role in recovery. Traders should align their positions accordingly, with a focus on overnight risk management,” added Ajit Mishra.